VLO
Valero Energy Corporation
$436.75
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 97.2% above fair value
You pay
$436.75
Bear
$187.46
Fair
$221.50
Bull
$241.93
Bear
$187.46
-57.1%
FCF $6099M × 10x
Fair
$221.50
-49.3%
FCF $5446M × 13x
Bull
$241.93
-44.6%
FCF $4792M × 16x
Adjust Assumptions
75.0$/bbl
13.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
24.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$450.44
Divergence from AlphaVal
51%
Summary
At $75/bbl oil with a 13x EV/FCF multiple, intrinsic value is $221.50 per share. Range: $187.46 (bear) to $241.93 (bull).
Warnings
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $450.44 (from 37 analysts). Our estimate is 51% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential